The cinema is not dead yet

Attendance may have dropped, but cinemas can still make money with food and premium tickets

The death of cinema was announced in the 1980s when video cassettes arrived. A decade later, its demise was again predicted when Internet piracy appeared. Going to the cinema would be a thing of the past, some said, when Netflix and iTunes showed up.

Those notices were a bit premature.

Last year, Singapore had 235 cinemas screens, the highest number in the nation's history.

Recently, the funeral bells for cinema tolled again.

The Department of Statistics' latest figures showed a dip in cinema attendance in the first part of this year, compared with last year.

The reasons put forward by industry insiders at first glance make sense - that the films released thus far were bad, that the Chinese New Year films this year were weak and that the entire cinema-going experience costs too much time and money.

Are the industry experts correct? Probably. But they leave out a couple of important trends, ones that will affect every sector in Singapore, not just the movie business.

So the box office might drop, but because of food promotions, overall cinema revenue might rise - why do you think the counter staff want you to spend a bit more to get the bigger bucket of popcorn?

First, let's put in perspective the 10.4 per cent three-month dip this year compared with last year.

Double-digit drops are important, even if they occur in such a short time slice. The lack of major hit movies are a big factor.

But coming to cinemas soon are three big movies: War For The Planet Of The Apes, Spider-Man: Homecoming and Dunkirk. And Transformers: The Last Knight just opened. Maybe these will more than compensate for the early slide.

The real issue here is that over the long term, the slide might become permanent, because the group that watches movies the most, those aged 15 to 30, is shrinking. Schools are merging and army camps are closing because the days of the youth bubble are behind us.

The silver lining for the cinema business is this: There are signs that their innovations are paying off.

I don't want to drown you in figures, but note that since 2014, the number of tickets sold has grown by just under 2 per cent.

But more tickets sold does not mean higher box-office earnings.

In 2015, two massive hits appeared: Jurassic World and Star Wars: The Force Awakens. More people seem to have paid for more expensive weekend, Imax and 3D tickets for those two films, because last year showed a drop to $201 million from $216 million in 2015, even though slightly more tickets were sold in 2016.

What this proves is that the widening price difference between ticket types (weekend, 3D, Imax, Gold Class and the like) will weaken the link between cinema attendance and box-office receipts.

In other words, cinemas might make money even as ticket sales drop because the group of people buying premium tickets is influential.

And don't forget that food - popcorn, soft drinks, tacos, hot dogs - now makes up to 50 per cent of the revenue earned by a cinema. Cinemas have to give a huge chunk of the ticket money back to the studios that made and distributed the films, so food sales is crucial.

So the box office might drop, but because of food promotions, overall cinema revenue might rise - why do you think the counter staff want you to spend a bit more to get the bigger bucket of popcorn?

These are the trends: The link between box office and cinema revenue is getting weaker. The Singapore cinema-going population is getting older and an older population can watch M18 and R21 films (and in fact, I would think they prefer to watch the harder-edged stuff).

And an older crowd can spend more, on premium tickets and on food (again, the popularity of dining-in or premium-class movie lounges show this to be true).

Finally, there is the rise of speciality cinema - namely, the Bollywood and art-house picture houses that have sprung up lately, offering a more varied mix to tempt you back into the hall after you have watched all the Marvel, DC and blockbuster epics at the cineplex.

So don't write off cinema yet.

To paraphrase the line in The Godfather (1972): Just when you thought you were out, they pull you back in.

A version of this article appeared in the print edition of The Straits Times on June 29, 2017, with the headline 'The cinema is not dead yet'. Print Edition | Subscribe